FBI scuttles contested $500 million, no-bid deal with Motorola

In the face of multiple vendor protests, the FBI has cancelled plans to hand industry giant Motorola Solutions Inc. a sole-source contract worth up to $500 million, saying that it will reassess how to upgrade the bureau’s antiquated nationwide two-way radio network.

Some of the different radio systems available to public safety agencies on November 30, 2013. (Nader Khouri/MCT)
MCT

In the face of multiple vendor protests, the FBI has cancelled plans to hand industry giant Motorola Solutions Inc. a sole-source contract worth up to $500 million, saying that it will reassess how to upgrade the bureau’s antiquated nationwide two-way radio network.

The FBI had argued, in a justification for skirting competitive bidding requirements, that switching to another vendor would force the purchase of a complete new system costing $1.2 billion. The existing Motorola network has proprietary features that can’t interact with non-Motorola equipment, so the FBI said sticking with Motorola would extend the use of equipment worth $300 million.

However, the bureau proposal in July was met by three formal protests to the Government Accountability Office, which adjudicates such cases, led by a small Florida radio manufacturer, RELM Wireless Corp. Ken Klyberg, RELM’s senior vice president for sales, said at the time that the industry’s adoption of uniform design standards for radios had ensured that other brands could connect to a Motorola system.

Klyberg said his Florida-based firm sells walkie-talkies meeting the same contract specifications as Motorola’s for about $1,700, compared with Illinois-based Motorola’s average price of about $4,200.

Another Florida contractor, the Harris Corp., and Texas-based E.F. Johnson Technologies, Inc., also protested the proposal. Harris argued that its equipment not only can work with legacy Motorola equipment, but also that the FBI already owns two Harris “cores,” or controllers, that have interacted with Motorola equipment for years.

Illinois-based Motorola commands an estimated 80 percent of the U.S. public safety market. In a series of articles published in late March, McClatchy detailed how Motorola has dominated the industry for decades, building deep loyalty among law enforcement and firefighting agencies and benefiting from biased contract specifications and other forms of favoritism from contracting officials.

Competitors have rarely fared well in protests of federal contract awards to Motorola.

However, in a letter to the GAO on Friday, assistant FBI General Counsel Jack Cordes Jr. said that the requirements laid out in the FBI’s solicitation were “not clear,” and that arguments for continuing an exclusive relationship with Motorola weren’t sufficient to comply with Federal Acquisition Regulations.

“Therefore, as corrective action, the FBI will cancel the solicitation and reassess its requirements, as well as the acquisition strategy for meeting them,” he wrote.

Besides proposing to upgrade the bureau’s 30-year-old system, the FBI’s solicitation also would have allowed about a dozen other law enforcement agencies within the Justice Department and U.S. Department of Homeland Security to buy up to about $170 million in equipment, as needed, from Motorola over the next five years.

Klyberg said in July that the FBI plan, if adopted, would “severely impact” RELM’s revenues, about 70 percent of which come from the federal government.

On July 15, just as the FBI was circulating its plans, three senior House Democrats sent a letter asking the inspector general for the U.S. Department of Homeland Security to examine allegations in the McClatchy stories, including evidence that state and local government contracting officials have shown favoritism toward Motorola.

Inspector General John Roth has yet to announce whether he will order an audit or investigation.